www.petromatad.com
Petro Matad is the parent company of a group focused on oil exploration, as well as future development and production in Mongolia. The Group’s principal asset is the Production Sharing Contract (PSC) over Matad Block XX, a petroleum block with an area of 14,250km2 in the far eastern part of Mongolia, near the Chinese border. Recently the company signed two more Production Sharing Contracts on Bogd Block IV and Ongi Block V, a total of approximately 71,000km² in central Mongolia. Petro Matad Limited’s shares were admitted to trading on AIM, London Stock Exchange, on May 1st, 2008. The company’s largest shareholder is Petrovis LLC, the largest importer and distributor of petroleum products in Mongolia. The company is the first substantially Mongolian owned company to have its shares admitted to trading on any major international stock exchange.
UPDATE: Petro Matad to start well testing in Mongolia shortly
UPDATE....with broker comment
Mongolian oil explorer Petro Matad Ltd (LON:MATD) said well testing is scheduled to begin shortly on the five wells drilled to date on the Davsan Tolgoi discovery - part of the Block XX in the country.
In a results statement for the year to end-December 2010, the group said the workover rig and testing equipment have been contracted to the end of calendar year 2011, and testing will continue on successive wells through the year. The logistics of importing and operating the workover rig are well advanced.
Earlier this month, Petro Matad spudded the DT-6 exploration well to test a very thick section of the Tsagaantsav formation at Block XX.
In addition to the on-going drilling programme in the north-eastern part of Block XX, the company has made big advances in the earlier-stage exploration of the rest of the block. It recently completed a major 2D seismic acquisition programme focusing mainly on the five unexplored basins located in the central and southern portions of the block.
In 2010 it mounted an exploration programme on the frontier Blocks IV and V, and calls the results from these endeavours “highly encouraging”.
A second seismic programme has already started, with contracts let to both Mongolian and international contractors for a total of over 1,750 kilometres.
In the coming year Petro Matad will continue an aggressive programme of drilling, completion and testing of Davsan Tolgoi. This may lead to adding one additional drilling rig and an expansion in the engineering and supervisory staff.
“We have already seen a dramatic improvement in drilling performance with the change to our current drilling contractor DQE International, from about three weeks per well in 2010 to about two weeks per well so far this year,” Petro Matad said.
“We have a commitment from the drill contractor to fully winterise at least one rig so that we will be able to maintain drilling operations year-round, and thus avoid the long shutdowns we have experienced over the past two winters.”
The company is also currently at an advanced stage of negotiations to import a state-of-the-art winterised western drilling rig staffed by personnel with year-round western operational experience. Petro Matad hopes to dramatically increase the rate of drilling wells.
Net loss for the year widened to US$16 million from US$5 million in 2009, mainly due to much higher exploration costs.
The results pleased house broker Westhouse Securities, which said the statement overall was ‘positive’. It added: “We particularly note the intention to drill year round on Block XX and the positive statement on the prospectivity on Blocks IV and V.”
The broker also highlighted the "strong" $51.7m cash position at the end of the year. It reiterates ‘buy’ on the stock, with a target price of 341p.
